As the dust settles from another election season, the conversations around the housing market continue to be clouded by misinformation and unfounded fears. Many anticipated dramatic shifts in home values or mortgage rates depending on the political outcome, but the truth is far less dramatic. The real estate market operates largely independent of short-term political events and remains grounded in enduring economic fundamentals.
Let’s break down three widespread myths about the housing market in the wake of an election.
Myth 1: Elections Cause Extreme Market Highs or Lows
A common misconception is that election outcomes directly trigger drastic changes in the housing market. Now that the election has passed, the data clearly shows that these fears were overblown.
While some seasonal fluctuations in home prices and sales occur around election periods, they are rarely significant or long-lasting. According to a study by Meyers Research, new home sales tend to dip slightly between October and November during presidential election years, with a median decrease of about 15%. However, this decline is typically followed by a quick rebound as the market stabilizes.
What’s evident now is that:
- Home prices remain stable in most areas.
- Seasonal patterns in sales volumes continue to dominate.
- Local market trends are the real drivers of real estate activity.
Election results may make for dramatic headlines, but their actual impact on the housing market is minimal compared to broader economic forces.
Myth 2: Mortgage Rates Surge After an Election
Many prospective buyers and homeowners worry that mortgage rates will spike based on election outcomes. However, this fear rarely aligns with reality. Mortgage rates are primarily influenced by broader economic conditions, such as Federal Reserve policies, inflation, and global economic stability—not the winner of an election.
In fact, mortgage rates often decline leading up to and during election years as lenders adopt a cautious approach in the face of uncertainty. Data from Freddie Mac shows that in eight of the last eleven presidential elections, mortgage rates dropped between July and November.
Key drivers of mortgage rates include:
- Federal Reserve decisions.
- Inflation trends.
- Overall economic growth.
- Global market conditions.
Post-election mortgage rates have remained steady, further proving that political outcomes have little direct impact on borrowing costs.
Myth 3: Election Years Are a Bad Time to Buy or Sell
Some people hesitate to make real estate moves during an election year, believing that political uncertainty makes it a poor time to buy or sell. However, the reality is that personal circumstances—not political events—are the main motivators behind real estate decisions.
Life changes such as job relocations, growing families, retirement, or financial opportunities often dictate when people buy or sell homes. These factors remain constant, regardless of election cycles.
Data from the National Association of Realtors shows that home sales have actually increased in the year following nine of the last eleven presidential elections. This highlights the resilience of the housing market and its ability to operate independently of political fluctuations.
What Truly Drives the Real Estate Market?
While elections dominate the news cycle, the real estate market is far more influenced by long-term economic fundamentals than short-term political events. These include:
- Employment rates and local job markets.
- Population growth and demographic trends.
- Housing inventory and new construction levels.
- Consumer confidence and overall economic health.
In addition, regional markets often operate independently of national trends. Some areas, like tech hubs, experience robust growth, while others face challenges due to economic shifts or demographic changes. Understanding these local nuances is key to making informed real estate decisions.
Moving Forward With Confidence
The post-election housing market demonstrates once again that real estate is driven by enduring economic principles and personal needs. Whether you’re a buyer, seller, or investor, the key to success lies in:
- Focusing on your unique financial goals.
- Researching local market trends thoroughly.
- Seeking guidance from experienced real estate professionals.
Elections come and go, but the demand for homes, communities, and financial security remains constant. By keeping a long-term perspective and making decisions based on sound advice, you can navigate the housing market with confidence—regardless of the political climate.
About Harcourts North America
Harcourts North America is part of an international real estate brand with over 135 years of experience helping clients buy and sell homes. With a focus on innovation, integrity, and exceptional service, Harcourts North America is committed to providing clients with the tools and expertise needed to navigate today’s dynamic housing market. Whether you’re buying, selling, or investing, Harcourts professionals are here to guide you every step of the way.